In contrast to the simulation-based WWE SmackDown vs. Raw series, WWE All Stars features arcade-style gameplay along with over-the-top animation and wrestlers bearing a more exaggerated look. The game is a combination of a fighting game and a wrestling game, with combos playing a major factor in gameplay, both on the ground and mid-air. Characters will perform exaggerated moves, such as John Cena's Attitude Adjustment, in which he leaps high into the air, Triple H's Pedigree with shock waves running across the ring and Bret Hart's Sharpshooter with a slow motion smile and finger pointed towards the crowd for a few seconds, prior to the same. The game features present WWE wrestlers such as Kofi Kingston, Randy Orton, Triple H, The Undertaker, Rey Mysterio, Big Show, John Morrison and John Cena and past (WWE/WWF) wrestlers such as The Ultimate Warrior, Hulk Hogan, Bret Hart, Jake the Snake, Eddie Guerrero and the "Macho Man" Randy Savage, as well as commentary from Jim Ross and Jerry Lawler, who is also a playable character.

It also features a Path Of Champions mode where players choose a WWE Legend or Superstar to either become the WWE Champion (Randy Orton's Path), the World Heavyweight Champion (Undertaker's Path) or the WWE Tag Team Champions (D-Generation-X's Path). The game also has options for using alternate attires for the WWE superstars from the past and present.